I’ll tell you how the financial statements of large companies are written

3 March 20242 months ago babelfish

Really, as the former editor of the Economist, Bill Emmott, writes, have the top managers of technology companies "bought democracy"? Riccardo Ruggeri's Cameo

Since the early 2000s I have been studying and writing about CEO capitalism (copyright). I cultivate my divertissement by drawing "scenarios". Some, dystopian, were published by Grantorino Libri as incipit books: “The plague is over. They're all dead, almost", "Gordon Comstock's Third World War", "Publishing & Amazon", "The Trial of Achilles K.". And so “War and Poetry”. Others are semi-finished products for Camei.

Today's one starts from an intuition by Bill Emmott, former Economist editor, on technology companies whose CEOs, he writes, "have bought democracy".

Fascinating summary that I share. Having been one of them, I know perfectly how the triad "Shareholders-CEOs-Investment Bankers" (the new masters of the Western world) thinks, how it works, how it moves on the battlefield (the legendary Market).

I am convinced (let's be clear, "psychological belief", therefore without a shred of proof) that the financial statements of certain companies that I define as "successful regardless" are constructed with new types of methods, which then heavily influence their economic-financial profile .

Let's be clear, no conspiracy by the shady Klaus Schwab, the financial statements of these companies are impeccable in form and content, exactly as both international and local laws prescribe, and it couldn't be otherwise, given the rigid rules and sophisticated controls to which they are subject. subjects.

I am referring to the moment in which both the annual budget and the multi-year strategic plan are constructed on paper. Those which will then, in the end, give rise to the official budgets, are roles-activities that are the responsibility of only the Shareholder, through his Board, then developed by the CEO, supported by his staff.

In normal companies the scheme has always been the same: revenues, costs and investments are hypothesized, the data is processed, and a number appears at the bottom right, before and after taxes. If it is positive, dividends are distributed, if it is negative, the shareholders will have to proceed with a capital increase within the established timescales. "Successful regardless" companies, on the other hand, are always profitable, with dividends and bonuses always skyrocketing. Why?

Before CEO capitalism there was classic Capitalism, in two versions, the "raw" one (the mythical masters of the ironworks of the early twentieth century), the "enlightened" one, also called "paternalist", such as Henry Ford I, Adriano Olivetti, Vittorio Valletta, Enrico Mattei; the cycle ended with Michele Ferrero.

These treated shareholders as equal to stakeholders, putting both at center stage. In CEO capitalism, however, only the interests of the shareholders are pursued (and maximized), in particular the relevant ones (and primarily the CEO), while the other stakeholders are kept out of the dining room, often tolerated with a certain annoyance. Thus inequalities exploded, because this was how they were planned in the execution phase of the model.

Here, however, in the forecasting phase, the budgets are constructed by reversing the classic mental process. The net profit is established first (it has always been the dream of every CEO), then the dividends for the shareholders, the value of the CEO's bonus-stock options, the extra large compensation for the embedded supporters (investment banks, lobbyists, consultants, media). Let's be clear, nothing illegal, they could explain to you that it is a "dream quote". According to this approach it is clear that the distribution of benefits is totally unbalanced in favor of the upper part of the company hierarchical pyramid. Taking it to the extreme, one could say that, with this model, employees, suppliers, taxation (the mythical stakeholders) will always and in any case be reduced to the level of formal subsistence. And the quality-price ratio of the products-services provided will be optimised, in such a way as to always penalize only the customers (when they notice it, there are techniques to recover).

The idea is brilliant. How did they do it?

In silence. Step by step. First with “wild globalisation”, then with “reflexive deglobalisation”. First with "wild immigration" then with the fake "reflexive integration". Constant in the background is "wild technology", which then becomes "reflexive". They have culturally separated the young from the old, redesigning the school system, the health system, the system of social rights, reducing them to the handmaiden of the so-called civil rights (all at zero cost). They have made the States increasingly indebted to reduce their capacity for social maneuver, and then attack private savings ("mobilize" is the obscene verb used by the educated). For very young people, the smartphone was the tool for second-level cultural indoctrination.

Thus they managed both to reduce the incomes of the middle and poor classes and, at the same time, increase the insecurity regarding the survival of almost all jobs. For those who lose their jobs and fall into poverty, it is irrelevant to know whether it is globalization or deglobalization or technology or war-sanctions or artificial intelligence that is to blame. What they see is an unstoppable movement of great wealth from the countryside and working-class suburbs, to the banks, to the stock exchange, and therefore to the more rarefied restricted traffic zones. From many decent people to a few people who are often bad, if we want to put it bluntly.

When the jobs will only be poor, and in any case poorly paid, when the medium-small companies will all fail, when the multinationals will become monopolies, when the media will all be embedded in power, when the food, thanks to the elimination of the farmers, will be exclusively chemical (but organic), when the only free market is that of drugs and pedophilia, we will have entered the new world of the new Millennium.

Ai (artificial intelligence) will do the final assembly and rule the entire ambaradan, as a foolish servant of power.

At that moment we will be able to remove the question mark from the title "Have CEOs bought democracy?".

See you on the next episode. Prosit!

This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/vi-racconto-come-si-scrivono-i-bilanci-delle-grandi-aziende/ on Sun, 03 Mar 2024 07:12:08 +0000.